Partners see future on Web Future: Two laid-back Baltimore media companies stake their newly merged destinies on Web site services

Media merger

July 30, 1998|By J. Leffall | J. Leffall,SUN STAFF

The laid-back atmosphere at the office of two new Baltimore media companies, e.magination Network LLC and gr.8, couldn't be more different from that of typical corporate America.

But executives at the two companies, which just concluded a merger, said their image, in tandem with the images they create for clients, is where corporate America is headed.

"You'll never see any ties around here, pal," said Michael Teitelbaum, president of e.magination, an Internet service company that in two years has launched more than 125 Web sites and has 48 more in various stages of production. "That's the whole point,though. It's fun, and what we do, along with the culture of our workplace, represents the future."

Even before this week's merger, e.magination, which designs and maintains Web sites for local and national companies, had been operating in conjunction with its "big brother," gr.8, a larger design company that handles everything from corporate logos and sales promotion kits to video animation and trade shows.

Having moved a month ago to a 16,000 square-foot office in the old American Can complex in Canton, Teitelbaum, 41, was looking to broaden the scope of his fledgling company by leasing space and seeking help on larger projects from gr.8, a $6.5 million business.

With gr.8's buyout of e.magination partner Syd Rubin for an undisclosed amount, the two companies will share capital and resources. They will keep using their old names.

"We've been working together for some time, and the synergy is great," said Craig Ziegler, 36, president of gr.8 and chief executive of the combined companies. "What this does is offer a functioning solution for any and all business and people in general who want to become Web savvy."

Ziegler expects the joined companies to double their current combined revenue of roughly $7 million in the coming year.

The merger of Ziegler's company and e.magination, which together will employ more than 40, got its start when Rubin ran into Ziegler at a Little League baseball game a year and a half ago.

"They talked, and then we moved in together with them in the office," Teitelbaum recalled. "It was sort of like a courtship which led to a marriage."

Both companies were conceived and reared in Baltimore, with e.magination emanating from Teitelbaum's direct mail advertising business and gr.8 coming straight out of a basement.

Teitelbaum and his partners broke into electronic commerce by helping to develop a Web site called hotcoupons.com to distribute coupons for clients.

"Some of our initial customers wanted a greater presence on the Web," he said. "So my partners and I decided to create e.magination to give them that extra exposure."

Ziegler's company, founded in 1985, started out on a $7,000 shoestring as a small design firm named Graffito.

Graffito merged with Exhibit Technology Inc., later renamed Active 8, which produced three-dimensional graphics and interactive audiovisuals for organizations and businesses. The names were combined to become gr.8 earlier this year.

Eric Spencer, gr.8's director of technology, said his company concentrates on total growth for clients.

"Historically, ad agencies play the role of stimulating sales, but sales activity is merely a subset of marketing," he said. "You have to drive the brand, formulate a strategy and define identity, work with the company and help it along instead of merely making a sales pitch to the public."

Gayle Streimer, in charge of client development at e.magination, said the Internet tells as vivid a story as any other medium.

"I try to give clients a crawl-walk-run approach to this way of doing business," she said. "It's an ongoing relationship."

But cyberspace is open territory, and companies are jockeying for position on the Web as hosts and content providers.

Dawn Simon, who covers Yahoo! Inc. for Brown Brothers Harriman in New York, said providing and maintaining Web sites is a very competitive business.

Yahoo, of Santa Clara, Calif., recently acquired Viaweb Inc., a company similar to e.magination. Viaweb charged $100 to $300 a month for being host for a site.

"There is definitely a need for Internet service providers that help businesses who want to outsource their products and services, and it can be lucrative, but it is extremely competitive and you have to be able to provide as well as maintain a site. For a company like Yahoo that gets 115 million hits per day, there is an advantage, but it's all about presentation," she said.

Teitelbaum said his company charges a minimum of $75 per month for being the host for a site.

"The whole concept of, 'If you build it, they will come,' doesn't work with a Web site. You have to stay there and grow with the company and the Web site," he said. "It's a long-term marketing strategy."

Among e.magination's customers are Sinai Hospital, Mercantile Bankshares Corp. and the Baltimore Opera Company. E.magination is helping the opera company expand its site to offer access to ticketing and seat purchases.

"We are thrilled with it," said Deborah Goetz, the opera company's director of marketing. "We are getting good feedback on the site. They really helped us identify what we wanted to convey and they really designed a site that says 'Baltimore' and makes us unique. They also helped us put together a lot of information and condensed it onto our site. They really helped us."

Ziegler's company has done design and marketing projects for Disney's Epcot Center in Florida, the Smithsonian Institution, ESPN and AT&T Corp.

"There is a mind meld between what they do and what we do," said Ziegler referring to the deal with e.magination. "We are sneaking up on the major ad firms and the Big Six consulting firms. When the modern day CEO realizes what we offer, he or she will realize that's where business is headed."